Tesco Best Performer Amongst Big Four But Still Losing Share To Discounters And Smaller Rivals

The latest grocery share figures from Kantar Worldpanel for the 12 weeks ending 22 May 2016 show the big four supermarket chains still suffering from falling sales, although Tesco managed to outperform its key rivals.

Overall, the market was essentially flat, posting value growth of just 0.1%. However, with food price deflation remaining at 1.5% the period was a positive performance for the market as a whole.

Tesco saw signs of stabilising in comparison to historic declines over the past two years, showing the smallest drop in sales of 1.0%. Meanwhile, having outperformed its rivals in recent months, Sainsbury’s sales declined 1.2% – which led to a drop in its market share to 16.2%. Kantar Worldpanel said that had been driven by a decline in pack sales, which is the short-term result of shifting its promotional emphasis from multi-pack deals to straightforward price cuts.

Asda’s low-price positioning continued to feel the targeted effect of Aldi and Lidl’s growth with its sales falling 5.1% on last year giving it a 15.8% share of the market. Sales at Morrisons slipped 2.1% as it continued to be affected by store disposals last year.

Meanwhile, Waitrose achieved a record share of the grocery market of 5.3%, growing sales by 2.1%. The Co-operative also continued its recent strong run, posting sales growth of 3.3% for the second period in a row to achieve a market share of 6.2%.

Lidl and Aldi remained the fastest growing retailers – up 14.2% and 11.4% respectively. Kantar Worldpanel said that this was not just about low prices but also the positive contribution from a shift to premiumisation. Aldi’s premium own label Specially Selected has grew by 15% while Lidl’s Deluxe range was up an impressive 65%.

Commenting on the data, Edward Garner, director at Kantar Worldpanel, said: “While the big four are struggling to keep their market share what’s clear is that consumers aren’t flocking away from their stores – their combined shopper numbers have dropped only 0.2% in the latest 12 weeks. In fact, 94% of Aldi and Lidl shoppers still visit at least one of the four major retailers every four weeks. However, consumers’ spend is increasingly being shared with other growing outlets which also include Waitrose, the Co-operative and Iceland and average household spend for the big four has dropped by 2.9%.”

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NAM Implications:
  • In other words, the structural changes remain (big space redundancy, smaller, nearer, cheaper, more frequent shopping)
  • With any mults’ growth coming at the expense of other mults…
  • Time to rebalance your customer portfolios and trading strategies?
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